Your P.O. Box Just Got More Expensive

By Billy House

July 9, 2014

Awash in red ink, the U.S. Postal Service is raising the rental fees for post-office boxes in 1,625 areas nationwide.

The increases will average about 20 percent for each box—which are typically offered in a range of sizes, from 3 inches by 5.5 inches to 22.5 inches by 12 inches, according to a notice posted Wednesday in the Federal Register.

More than 6,900 locations have been charging the higher fees since 2011. Starting on Aug. 27, those increases will hit boxes located in a wide range of additional zip codes, from parts of the Bronx to Wasilla, Alaska.

The Federal Register notice includes a list of the affected locales and their zip codes.

The common denominator for being pegged for the pricing changes is that each of these areas are being moved from a "market-dominant fee group" to "competitive fee group." In other words, the Postal Service has determined it no longer holds a post-office box monopoly in those localities—and so it now faces competition from private companies.

The Postal Service says it is responding by providing "competitive service" that includes "several enhancements." The notice says that includes such things as electronic notification of the receipt of mail, signature already on file for delivery of certain accountable mail, and additional hours of access and/or earlier availability of mail in some locations.

Nationwide, the Postal Service manages more than 21 million post-office boxes. According to a 2013 USPS Office of Inspector General Report, these boxes accounted for $836 million in fee revenue in fiscal year 2012. The Federal Register notice does not provide a projection of how much more will be raised by the move.

Specific new charges for each size of box differ among various zip codes across the country.

But David Rubin, an attorney for the U.S. Postal Service, said the 20 percent price hike, for instance, would mean a customer now renting a small box for $53 every six months would instead have to shell out about $64 every six months. The largest box would go from about $440 for six months to about $528.

Boxes can be rented for as short a period as three months.

Aside from the Federal Register, the price hike has not attracted wide attention amid the outcry over the Postal Service's push to close or downsize more than 80 mail-processing facilities nationwide after January.

In May, the Postal Service announced it had ended the second quarter of its 2014 fiscal year with a net loss of $1.9 billion—despite an actual increase in operating revenue of $379 million. The bulk of the agency's financial problems stem from the federally mandated annual payments to cover expected health care costs for future retirees.